Major tax relief is dropped in standoff budget agreement.
Dear members,
A major tax relief package strongly supported by NFIB and
other business groups was one of the casualties of the recent budget agreement
that was reached by House Speaker Kurt Daudt (Crown) and Senate Majority Leader
Tom Bakk (Cook). Dropping the tax bill was part of an agreement between
the two leaders that also included dropping the very controversial Senate transportation
bill which included a large gas tax hike. Based on current economic trends, the
$1 billion surplus is likely to grow and we will have the whole debate
again next year about trying to provide major tax relief for small businesses
and other taxpayers.
The agreement between the two leaders, which is partially in
jeopardy due to a veto threat by Gov. Dayton, would have set the state
general fund budget at $41.5 billion and pretty much comes down right in the
middle between the House passed budget and Gov. Dayton’s proposed
budget. Many were surprised that legislative leaders would leave that
large sum of money sitting in surplus, but with the big differences between the
House and the Senate on tax and spending issues, that was the only deal that
apparently could be reached. A few weeks ago, the Senate passed a very
minimal tax relief bill and that was certainly a bad sign that an agreement may
not be reached in the conference committee with the House.
As the session wrapped up, a workers’ compensation reform
bill did pass and was sent to the governor that addresses significant problems
with the health care component of workers’ compensation and could lead to
significant future savings.
Even though the legislature has adjourned, they likely will
still be playing ball in the weeks to come since Gov. Dayton has promised to veto
the education funding bill due to a disagreement about a lack of funding for a
new pre-kindergarten program that even the Senate Democrats did not include in
their education funding bill. His veto
will require a special session to be held sometime soon to repass the education
spending bill.
Mike Hickey
NFIB/Minnesota state director
